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Modern Real Estate Quiz Answer Key updated
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Modern Real Estate Quiz Answer Key updated
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Modern Real Estate QuizCircle the letter of the Answer that corresponds to the displayed Question.
1. Subrogation Clause
A. included in a promissory note requiring the borrower to pay a penalty against the unearned portion of the interest for any
payments made ahead of schedule.
B. Any rights the insured had to sue the person who caused the damage are assigned to the insurance company that has
already paid the insured for the damages.
C. The support a parcel of land receives from adjacent land; a neighbor's duty to support adjoining land in its natural state.
D. farms, timberland, ranches, and orchards.
2. Working with Real Estate Agents
A. A mandatory agency information brochure that a licensee must give to and review with consumers in all real estate sales
transactions no later than first substantial contact; it does not create agency.
B. A survey that shows the lay of the land.
C. The most popular repayment plan; both the interest rate and the debt service amount are set for the duration of the loan
D. Generated by movement of electrical currents; prolonged exposure may cause cancer; major concern for property
owners near high voltage line
3. Fixture
A. A dwelling(mobile home) built under HUD regulations with a permanent chassis. Considered personal property until
moving hitch, wheels and axles are removed, the unit is attached to a permanent foundation on land, and an affidavit is filed
with the DMV.
B. Regulates standards for real property taxation, standards for tax assessment and appraisal.
C. An item of personal property that has been converted to real property by being permanently affixed to the realty.
D. A decree issued by a court.
4. Contract
A. A legally enforceable promise or set of promises between legally competent parties.
B. one who is employed by a person already acting as an agent (and agent of the agent).
C. A necessity allowed by law; for example, the right of a life tenant to use some of the property's resources to provide for
needed repairs.
D. Owned by two or more parties usually not husband and wife; undivided equal interest unless stated; each owner
receives share when sold can transfer without other signing; can acquire at different times; if not stated, tenants in common;
never survivorship
5. Remainder Interest
A. Caused by factors outside the subject property & is not curable. ex: proximity to a polluting plant
B. Something that is not covered for loss in an insurance policy.
C. A future interest in real estate created by the grantor for some third party that will be enjoyed after the termination of a
prior estate, such as when an owner conveys a life estate to one party and the remainder to another.
D. created when a property owner promises to give the contracting party the first chance to buy the property or to match
the bona fide offer of a third party, should the owner decide to sell.
6. interest
, A. a mortgage that requires the mortgagor to pay a constant amount, usually monthly, that will completely pay off the loan
amount with the last equal payment.
B. a personal judgment levied against the borrower when a foreclosure sale does not produce sufficient funds to pay the
mortgage debt in full; a general lien
C. a charge for the use of borrowed money
D. The tract over which an easement runs.
7. Agency
A. A flexible moment in time when conversation between a licensee an a consumer begins to address confidential needs,
desires and abilities; latest moment to legally disclose agency choices to a consumer.
B. NC requirements as to construction standards, with the primary purpose being safety.
C. the fiduciary relationship between the principal and the agent.
D. A lender in a deed of trust loan transaction; the recipient of personal property in a will
8. Total Circumstances Test
A. The capacity to satisfy future owners needs and desires; how future owners can make good use of the property.
B. The point at which a metes and bounds description begins.
C. A legal test applied by the courts to determine whether an item is a fixture (and. therefore, part of the real property) or
personal property.
D. A declaration of limitations established by a developer.
9. Tenancy in Common
A. A decree issued by a court.
B. Owned by two or more parties usually not husband and wife; undivided equal interest unless stated; each owner
receives share when sold can transfer without other signing; can acquire at different times; if not stated, tenants in common;
never survivorship
C. also called a "term loan", it only calls for periodic payments of interest.
D. The violation of any terms or conditions in a contract without legal excuse; for example, failure to make a payment when
it is due.
10. employment contract
A. In real estate, generally a listing agreement, a buyer agency agreement or a management agreement (a document
evidencing formal employment between principal and agent).
B. Certain properties can be restricted to occupancy by elderly persons. HOPA--Housing for Older Persons Act of 1995. 62
or older or housing occupied by at least one person 55 or older per unit.
C. The time a buyer has to have property inspected, title examined, and review any leases to determine if the property
meets his or her needs.
D. insulating material that is applied to the wall framing; then siding is applied on top of it
11. crawl space
A. Federal law that requires federally chartered or insured lenders or provide buyers and sellers of 1-4 family homes,
coops, condos with info on all settlement costs
B. A clause in insurance policies covering real property that requires that the policyholder maintain fire insurance coverage
generally equal to at least 80 percent of the property's actual replacement cost.
C. Owns a share of stock in the corporation and has a proprietary lease to the unit
D. the space between the ground surface and the first floor; frequently found in homes w/o basements that are not built on
a slab foundation
,12. Material fact
A. profits from assets owned longer than 12 months; taxed at a lower rate than ordinary income
B. A loan made to a borrower with a credit rating below what is required for regular loans creating greater liability for the
lender that is countered by higher interest rates and fees; called B, C, or D paper.
C. natural water level whether it is above or below ground level
D. any fact that is important or relevant to the issue at hand; mandatory disclosure by all agents in a transaction to all
parties of the transaction
13. Subdivision
A. modeled after the Residential Agreements Act, it establishes uniform rules for landlords, tenants, and their agents
involved in the handling of short-term rentals under 90 days in length where tenant has primary residence elsewhere.
B. dual legal personality
C. the final step in the appraisal process, in which the appraiser combines the estimates of value received from the sales
comparison, cost, and income capitalization approaches to arrive at a final estimate of market value for the subject property.
D. All divisions of a tract or parcel of land into two or more lots, building sites, or other divisions for the purpose of sale or
building development
14. time is of the essence
A. a flexible payment plan that allows a mortgagor to make lower monthly payments for the first few years of the loan and
larger payments for the remainder of the term.
B. The channeling of homeowners to particular neighborhoods based on the presence or absence of a protected class.
C. This means that the contract must be performed within the time limit specified, and any party who has not performed on
time is liable for breach of contract.
D. cost of any physical capital improvements that add value to the property or prolong its life (added to the cost basis)
15. executed contract
A. Growing crops, such as grapes and corn, that are produced annually through labor and industry; also called fructus
industriales. Usually considered to be personal property,
B. The tract over which an easement runs.
C. A contract in which all parties have fulfilled their promises.
D. churches, schools, cemeteries, and government held lands.
16. interest-only mortgage
A. The period during which property is expected to remain useful for its original intended purpose.
B. An insurance policy covering buildings and personal property against loss or damage from fire, lighting, removal,
windstorm, hail, explosion, riot, smoke, vandalism and theft.
C. An official valuation of property for the purpose of establishing assessed value for tax purpose.
D. also called a "term loan", it only calls for periodic payments of interest.
17. PITI
A. Principal, Interest, Taxes, and Insurance
B. ratio of debt to value of the property
C. natural water level whether it is above or below ground level
D. a concrete support under a foundation, chimney. or column that usually rests on solid ground and is wider than the
structure being supported
18. Certificate of Occupancy
, A. an IRS sanctioned method for real estate investors to defer taxation of capital gains by making a property exchange
rather than by selling the investment property
B. In North Carolina, a fixture attached to leased property by a tenant farmer is considered the landowner's real property
rather than the tenant's personal property.
C. Issued upon the satisfactory inspection of a structure; building is fit for occupancy and there are no building code
violations
D. exterior roofing material frequently made of fiberglass, asphalt, or wood
19. Caveat emptor
A. The time a buyer has to have property inspected, title examined, and review any leases to determine if the property
meets his or her needs.
B. a gov't agency under HUD that sells mortgage-backed securities that are backed by pools of FHA and VA loans
C. let the buyer beware
D. created when the landlord and tenant enter into an agreement that continues for a specific period, being automatically
renewed for an indefinite time without a specific ending date; automatically renews.
20. Accretion
A. churches, schools, cemeteries, and government held lands.
B. Illegal practice by lending institutions to deny or discourage loan application in an area based on its racial composition or
deterioration.
C. Acquiring title to additions or improvements to real property as a result of the annexation of fixtures or the accretion of
alluvial deposits along the banks of streams.
D. Physical or design features that are no longer considered desirable by property buyers but can be replaced or
redesigned at low cost. ex: changing fixtures
21. Fee Simple with Condition Subsequent
A. a loan in which the monthly payments increase annually, with the increased amount being used to reduce directly the
principal balance outstanding and thus shorten the overall term of the loan.
B. An estate in real estate that prohibits a specific condition on the property. Grantor has the right to re-enter the property
and reclaim ownership through legal proceedings.
C. Areas outside incorporated limits that are subject to the zoning restrictions of a municipality
D. The country's central banking system, which controls the nation's monetary policy by regulating the supply of money and
interest rates
22. installment sale
A. A transaction in which the sales price is paid in two or more installments over two or more years. If the sale meets
certain requirements, a taxpayer can postpone reporting such income until future years.
B. The effort that began a chain of events that brings about the desired result. Under an open listing, the broker who is the
procuring cause of the sale receives the commission.
C. A deliberate agreement between parties offer and acceptance; "meeting of the minds." A requirement of a legally
enforceable contract.
D. this act governs residential leases and landlord-tenant relationships; its purpose is to ensure that only habitable
residential unties are rented. Does not apply to hotels, motels, rent-free or commercial properties.
23. a lease is said to have ___ ___ ____ because it is a contract and it conveys an interest in real property.
A. dual legal personality
B. A contract that has no legal force or effect. It is unenforceable in a court of law b/c it does not meet the essential
elements of a contract.
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